The action cannot be completed. The connection to Microsoft Exchange is unavailable. Outlook must be online or connected to complete this action.

This often occurs when attaching a new Outlook client to an Exchange mailbox in the mail control panel interface. This error is so common that Microsoft wrote a handy Knowledge Base article to address the issue: (http://support.microsoft.com/kb/927481).

However, the article doesn’t touch on what – in my experience – is the most common cause of this error message: improperly configured software firewalls.

Now if you have a smart enough firewall, it will prompt you to either allow or deny access between Microsoft Outlook and the remote server when Outlook attempts to contact the Exchange server for the first time. Many firewalls, including every version of Microsoft’s Windows firewall I’ve used, will not prompt you or provide any indication that the firewall is blocking the connection.

Of course this will only fix the problem if your DNS is configured correctly (which you can check with nslookup or by pinging the server), and you know that your Exchange server is functioning properly (which you can verify by using Outlook Web Access in your browser, or by testing the mailbox on another user’s workstation).